Energy company takeovers by state-owned enterprises may lead to more fracking in B.C.

The purchase by Chinese and Malaysian state enterprises of two Alberta energy companies has significant implications for fracking in B.C.

Nexen Inc. and Progress Energy Resources Corp. operate in both Alberta and the shale gas fields of northeastern B.C., and use a controversial extraction technique known as hydraulic fracturing, or fracking. On December 7, Prime Minister Stephen Harper announced that the Conservative government had approved the $15-billion sale of Nexen to the China National Offshore Oil Corporation, and the $5-billion purchase of Progress Energy by the Malaysian state-owned company Petronas.

Although it’s Nexen’s oil-sands production in Alberta that has received much of the public attention surrounding the deals, Cariboo North independent MLA Bob Simpson fears that the foreign acquisitions could hamper any move toward tighter regulation of fracking in B.C.

“I think we’ll wind up most likely in court with these enterprises, who won’t want us to change regulations from the pretty lax and relaxed ones we have right now to something more stringent,” Simpson told the Straight in a phone interview.

Environmentalists have raised serious concerns about the effects of fracking, which involves the pressurized injection of water, sand, and chemicals underground to release gas deposits.

“The [B.C.] Oil and Gas Commission already favours saying yes to everything,” Simpson said. “And now we add…enterprises owned by state governments that don’t have the same environmental regulations, human-rights regulations, [and] same kinds of freedom of speech. If they want to impose their more totalitarian regimes, where they just want the [federal and provincial] government[s] to just say, ‘Put aside First Nations rights and title, put aside environmental concerns, just get it done,’ then I think we’ve opened up a real can of worms.”

The Petronas purchase of Progress Energy is of particular concern to Matt Horne, director of the climate-change program at the Pembina Institute, a nonprofit that promotes sustainable energy.

Horne recalled that a few days before the approval of the sale was announced by the federal government, Petronas and Progress Energy declared that if the bid was okayed, they intended to increase the capacity of a planned liquefied-natural-gas export facility on the north coast of B.C. that will receive fracked gas through a new pipeline.

According to Horne, the two companies had originally projected a processing capacity of eight million tonnes a year at the future plant. With the takeover of Progress, that target will increase to 18 million tonnes of LNG, representing intensified fracking operations in northeastern B.C.

“We have to have a conversation in B.C. and in Canada about the development we want,” Horne told the Straight by phone, “because the more we strike these deals, whether these are Canadian companies or foreign companies, the more we’re locked into a development that may not be in our interest.”

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nimby

Dec 13, 2012 at 10:27pm

I cannot help but to see the problems which arise from this article. Like every other Canadian citizen, I am concerned about the environmental issues which need to be addressed. However, to claim that "foreign acquisitions could hamper any move toward tighter regulation of fracking in BC" is problematic in this context. I think that this article doesn't address the fact that initially Nexen was 80% owned by Occidental Petroleum, an American oil company; the operations of Nexen expand outside of Canada to the Gulf of Mexico, Colombia and offshore West Africa. To claim that foreign takeovers of a Western company may instigate an imposition of totalitarianism is problematic because it is just a fraction of a whole picture. Western companies which operate in "foreign" countries often take advantage of the poor working conditions and regulations present. What you are suggesting is that foreign ownership equates to an instilling of "foreign" ideology.